SUMMARY: This proposed rule would
establish regulations applicable to the Quality
Samples Program (QSP). The proposed regulations
set forth details concerning program
administration, including participant
eligibility, application requirements, review
and allocation process, reimbursement rules and
procedures, and program controls.
DATES: Comments concerning this rule
should be received on or before October 2, 2006
to be assured consideration.
ADDRESSES: Comments must be submitted to
Director, Marketing Operations Staff, Foreign
Agricultural Service, U.S. Department of
Agriculture, Stop 1042, 1400
Independence Ave., SW., Washington, DC
20250-1042; by phone at (202) 720-4327; by fax
at (202) 720-9361; or by e-mail at
FOR FURTHER INFORMATION CONTACT:
Marketing Operations Staff by phone at (202)
720-4327; by fax at (202) 720-9361; or by e-mail
Executive Order 12866
This rule is issued in conformance with Executive Order
12866. It has been determined non-significant
for the purposes of Executive Order 12866.
Regulatory Flexibility Act
It has been determined that the Regulatory Flexibility Act is
not applicable to this rule because the
Commodity Credit Corporation is not required by
any provision of law to publish a notice of
proposed rulemaking with respect to the subject
matter of this rule.
Executive Order 12988
This proposed rule has been reviewed in accordance with
Executive Order 12988, Civil Justice Reform. The
rule would have preemptive effect with respect
to any State or local laws, regulations or
policies which conflict with such provisions or
which otherwise impede their full
implementation; would not have retroactive
effect, and does not require administrative
proceedings before suit may be filed.
Executive Order 12372
This program is not subject to the provisions of Executive
Order 12372, which require intergovernmental
consultation with State and local offices (See
the notice related to 7 CFR part 3014, subpart
V, published at 48 FR 29115).
The Unfunded Mandates Reform Act of 1995
This rule contains no Federal mandates under the regulatory
provisions of Title II of the Unfunded Mandates
Reform Act of 1995 (UMRA) for State, local and
tribal governments or the private sector. Thus,
this rule is not subject to the requirements of
sections 202 and 204 of the UMRA.
Executive Order 13132
It has been determined that this rule does not have
sufficient Federalism implications to warrant
the preparation of a Federalism impact
statement. The provisions contained in this rule
will not have a substantial direct effect on
States or their political subdivisions, or on
the distribution of power and responsibilities
among the various levels of government.
Paperwork Reduction Act of 1995
In accordance with section 3507(j) of the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.), the
Commodity Credit Corporation (CCC) requests
approval of a new information collection in
support of the Quality Samples Program.
Title: Quality Samples Program.
OMB Control Number: Not yet assigned.
Type of Request: Approval of an information collection.
Abstract: This information is needed to administer CCC's
Quality Sample Program. The information will be
gathered from applicants desiring to receive
grants under the program to determine the
viability of requests for funds.
Estimate of Burden: Public reporting burden for this
collection of information is estimated to
average 32 hours per year per respondent.
Respondents: U.S. government agencies, State
government agencies, non-profit trade
associations, agricultural cooperatives, and
Estimated Number of Respondents: 30.
Estimated Number of Responses per Respondent: 5.
Estimated Total Annual Burden on Respondents: 960 hours.
Proposed topics for comments are: (a) Whether the collection
of information is necessary for the proper
performance of the functions of the agency,
including whether the information will have
practical utility; (b) the accuracy of the
agency's estimate of burden including the
validity of the methodology and assumptions
used; (c) ways to enhance the quality, utility,
and clarity of the information to be collected;
or (d) ways to minimize the burden of the
collection of information on those who are to
respond, including the use of appropriate
automated, electronic, mechanical or other
technological collection techniques or other
forms of information technology. Comments should
be sent to the Desk Officer for
Agriculture, Office of Information and
Regulatory Affairs, Office of Management and
Budget, Washington, DC 20503 and to: Director,
Marketing Operations Staff, Foreign Agricultural
Service, Stop 1042, U.S. Department of
Agriculture, 1400 Independence Ave.,
SW., Washington, DC 20250-1042.
Copies of this information collection may be obtained from
Tamoria Thompson, FAS' Information Collection
Coordinator, at (202) 690-1690.
Government Paperwork Elimination Act
The Foreign Agricultural Service is committed to compliance
with the Government Paperwork Elimination Act (GPEA),
which requires Government agencies, in general,
to provide the public the option of submitting
information or transacting business
electronically to the maximum extent possible.
Accordingly, applications for participation in
the Quality Samples Program may be submitted
online. Payment transactions will be handled
both electronically and in paper form.
Section 5(f) of the CCC Charter Act, 15 U.S.C. 714c(f)
authorizes CCC to aid in the development and
expansion of export markets for U.S.
agricultural commodities. The QSP is intended to
accomplish this market development by assisting
U.S. entities provide commodity samples to
potential foreign importers to promote better
understanding and appreciation for the high
quality of U.S. agricultural products. The QSP
is administered by personnel of the Foreign
List of Subjects in 7 CFR Part 1483
Agriculture commodities, Exports.
Accordingly, CCC proposes to amend Title 7 of the Code of
Federal Regulations by adding a new part 1483 to
read as follows:
PART 1483--QUALITY SAMPLES PROGRAM
1483.1 What is the Quality Samples Program?
1483.2 What special definitions apply to the QSP?
1483.3 Who can apply to the QSP?
1483.4 What type of activity is appropriate for
1483.5 What may be reimbursed under the QSP?
1483.6 What is the process for submitting
1483.7 How are proposals evaluated?
1483.8 How are agreements formalized?
1483.9 How are payments made?
1483.10 What are the reporting requirements?
1483.11 How is program compliance monitored?
1483.12 Miscellaneous provisions
Authority: Section 5(f) of CCC Charter Act, 15 U.S.C.
Sec. 1483.1 What is the
Quality Samples Program?
The Quality Samples Program (QSP) is designed to encourage
the development and expansion of export markets
for U.S. agricultural commodities by assisting
U.S. entities in providing commodity samples to
potential foreign importers to promote a better
appreciation for the high quality of U.S.
agricultural commodities. The QSP is
administered by personnel of the Foreign
Agricultural Service (FAS). Under the QSP, a
participant would provide information to target
audiences regarding the attributes,
characteristics, and proper use of
U.S agricultural commodities.
Sec. 1483.2 What special
definitions apply to the QSP?
For purposes of this part, the following definitions apply:
Activity--A project undertaken to provide an appropriate
sample of a U.S. agricultural commodity and
appropriate technical assistance to a foreign
importer, or a group of foreign importers, in a
Affiliate--Any partnership, association, company,
corporation, trust, or any other such party in
which the participant or its membership has an
investment, other than in a mutual fund.
CCC--Commodity Credit Corporation.
Eligible Organization--Any United States private or
government entity with a demonstrated role or
interest in exporting U.S. agricultural
FAS--Foreign Agricultural Service, United States Department
QSP--Quality Samples Program.
Sample--A U.S. agricultural commodity provided to a foreign
importer, or group of foreign importers in
quantities less than a typical commercial sale
and limited to the amount sufficient to achieve
the goals of an activity approved by CCC.
UES--Unified Export Strategy.
Sec. 1483.3 Who can apply to the
Any United States private or government entity with an
interest in exporting U.S. agricultural
commodities may apply to the program. Government
organizations include Federal, State, and local
agencies. Private organizations include
non-profit trade associations, universities,
agricultural cooperatives, state regional trade
groups, and profit-making entities.
Sec. 1483.4 What type of activity
is appropriate for the QSP?
(a) In order to be approved for funding under this part:
(1) A QSP activity must provide broad benefit to the
represented U.S. industry and not to a specific
company or brand;
(2) A QSP activity must target a single market/commodity
combination and develop a new market for a U.S.
product, promote a new U.S. product, or promote
a new use for a U.S.
product, rather than promote the substitution of
one established U.S. product for another;
(3) Samples provided under a QSP activity must represent
commodities that are in sufficient supply and
available on a commercial basis;
(4) A QSP activity shall either subject the commodity sample
to further processing or substantial
transformation in the importing country, or the
sample must be used in technical seminars
designed to demonstrate to an appropriate target
audience the proper preparation or
use of the sample in the creation of an end
(5) Samples provided in a QSP activity shall not be directly
used as part of a retail promotion or supplied
directly to consumers. However, the end product,
i.e., the product resulting from further
processing, substantial transformation, or a
technical seminar, may be provided to end-use
consumers to demonstrate to importers consumer
preference for that end product; and,
(6) A QSP activity must include the provision of technical
assistance to facilitate successful use of the
sample by the target audience.
(b) QSP activities shall target foreign importers or entities
that meet at least one of the following
(1) Have not previously purchased the U.S. commodity that
will be sampled under the QSP;
(2) Are unfamiliar with the variety, quality attribute, or
end-use characteristic of the U.S. commodity
which will be sampled under the QSP;
(3) Have been unsuccessful in previous attempts to import,
process, and market the U.S. commodity which
will be sampled under the QSP (because of
improper specification, blending, or
formulation; or sanitary or phytosanitary
(4) Need technical assistance in processing or using the U.S.
commodity that will be sampled under the QSP.
Sec. 1483.5 What may be
reimbursed under the QSP?
(a) Each QSP participant is responsible for procuring (or
arranging for the procurement of) commodity
samples, transporting the samples from the point
of purchase to the destination, and providing at
the destination the technical assistance
necessary to facilitate successful use of the
samples by the target audience. Participants
that are funded under this announcement may seek
reimbursement for the sample purchase price and
the costs of transporting the samples
domestically to the port of export and then to
the foreign port, or point of entry.
Transportation costs from the foreign port, or
point of entry to the final destination will not
be eligible for reimbursement. CCC will not
reimburse the costs incidental to purchasing and
transporting samples, for example, inspection or
documentation fees. Although providing technical
assistance is required for all projects, CCC
will not reimburse the costs of providing
technical assistance. A QSP
participant will be reimbursed after CCC reviews
its reimbursement claim and determines that the
claim is complete.
(b) The number of activities per participant will not be
limited. However, individual activities will be
limited to $75,000 of QSP reimbursement.
Activities comprised of technical preparation
seminar, i.e., projects that do not include
further processing or substantial
transformation, will be limited to $15,000 of
QSP reimbursement as these projects require
smaller samples. CCC will not reimburse
expenditures made prior to approval or a
proposal or unreasonable expenditures.
Sec. 1483.6 What is the
process for submitting proposals?
(a) CCC will periodically announce that it is accepting
proposals for participation in the QSP. The
announcement will contain relevant information
such as application deadlines. Proposals must be
submitted in accordance with the terms of the
(b) Organizations can submit applications to CCC through FAS'
Unified Export Strategy (UES) application
Internet Web site. Applicants also have the
option of submitting electronic versions in the
UES format (along with two paper copies) of
their applications. However, the UES format is
(c) To be considered for the QSP, an applicant must submit
information detailed in this part. In addition,
all applicants must submit a Dun and Bradstreet
Data Universal Numbering System (DUNS) number.
An applicant may request a DUNS number at no
cost by calling the dedicated toll-free DUNS
number request line at 1-866-705-5711.
Incomplete applications and applications which
do not otherwise conform to this part will not
be accepted for review.
(d) Applicants to the QSP are not required to submit
proposals in any specific format; however,
proposals should contain, at a minimum, the
(1) Organizational information, including:
(i) Organization's name, address, Chief Executive Officer (or
designee), Federal Tax Identification Number
(TIN), and DUNS number;
(ii) Type of organization;
(iii) Name, telephone number, fax number, and e-mail address
of the primary contact person;
(iv) A description of the organization and its membership;
(v) A description of the organization's prior export
promotion experience; and
(vi) A description of the organization's experience in
implementing an appropriate trade/technical
(2) Market information, including:
(i) An assessment of the market;
(ii) A long-term strategy in the market; and
(iii) U.S. export value, volume and market share (historic
and goals) for the time period specified in the
(3) Project information, including:
(i) A brief activity title;
(ii) Amount of funding requested;
(iii) A brief description of the specific market development
trade constraint or opportunity to be addressed
by the activity, performance measures for the
time period specified in the applicable
announcement, which will be used to measure the
effectiveness of the project, a benchmark
performance measure as specified in the
applicable announcement, the viability of long
term sales to this market, the goals of the
activity, and the expected benefits to the
(iv) A description of the activities planned to address the
constraint or opportunity, including how the
sample will be used in the end-use performance
trial, the attributes of the sample to be
demonstrated and its end-use benefit, and
details of the technical servicing component
(including who will provide and who will fund
(v) A sample description (i.e., commodity, quantity, quality,
type, and grade), including a justification for
selecting a sample with such characteristics
(this justification should explain in detail why
the activity could not be effective with a
(vi) An itemized list of all estimated costs associated with
the activity for which reimbursement will be
(vii) The importer's role in the activity, including its
handling and processing of the commodity sample;
(viii) Information indicating all funding sources and amounts
to be contributed by each entity that will
supplement implementation of the proposed
project. This may include the organization that
submitted the proposal, private industry
entities, host governments, foreign third
parties, CCC, FAS, or other Federal agencies.
Contributed resources may include cash or goods
Sec. 1483.7 How are proposals
(a) All proposals will be reviewed against the evaluation
criteria contained herein and funds will be
awarded on a competitive basis. FAS will use the
following criteria in evaluating proposals:
(1) The ability of the organization to provide an experienced
staff with the requisite technical and trade
experience to execute the proposal;
(2) The extent to which the proposal is targeted to a market
in which the United States is generally
(3) The potential for expanding commercial sales in the
(4) The nature of the specific market constraint or
opportunity involved and how well it is
addressed by the proposal;
(5) The extent to which the importer's contribution in terms
of handling and processing enhances the
potential outcome of the project;
(6) The amount of reimbursement requested and the
organization's willingness to contribute
resources, including cash and goods and services
of the U.S. industry and foreign third parties;
(7) How well the proposed technical assistance component
assures that performance trials will effectively
demonstrate the intended end-use benefit.
(b) Highest priority for funding will be given to meritorious
proposals that target countries that meet either
of the following criteria:
(1) Per capita income as set forth in the applicable
announcement; and population greater than 1
million. Proposals may address suitable regional
groupings, for example, the islands of the
Caribbean Basin; or
(2) U.S. market share of imports of the commodity identified
in the proposal of 10 percent or less.
(c) Proposals will be evaluated by the applicable FAS
commodity division. The divisions will review
each proposal against the factors described
above. The purpose of this review is to identify
meritorious proposals, recommend an appropriate
funding level for each proposal based upon these
factors, and submit the proposals and funding
recommendations to the Deputy Administrator,
Commodity and Marketing Programs.
Sec. 1483.8 How are agreements
(a) Under the QSP, CCC enters into agreements with approved
participants to share the costs of certain
overseas marketing and promotion activities.
Funding for successful proposals will be
provided through specific agreements. These
agreements will incorporate the regulations of
this part 1483 and the proposal as approved by
CCC. Amendments to these agreements are only
valid if approved by CCC in writing.
(b) CCC, through FAS, will notify each applicant in writing
of the final disposition of its application. CCC
will send an approval letter and agreement to
each approved applicant. The approval letter and
agreement will specify the terms and conditions
applicable to the project, including the levels
of QSP funding and any cost-share contribution
requirements. Agreements may also outline
specific responsibilities of the participant,
including, but not limited to, arranging for
transportation of the commodity sample within a
time limit specified in the agreement and timely
and effective implementation of technical
(c) Termination of agreements: CCC reserves the right to
unilaterally terminate QSP agreements where CCC
has a reasonable basis for concluding that there
has been a violation of any requirements in this
Sec. 1483.9 How are payments
Financial assistance will be made available on a
reimbursement basis; that is, cash advances will
not be made available to any QSP participant.
(a) Following the implementation of an activity for which CCC
has agreed to provide funding, a participant may
submit claims for reimbursement of eligible
expenses to the extent that CCC has agreed to
pay such expenses. Any changes to approved
activities must be approved in writing, and in
advance, by CCC before any reimbursable expenses
associated with the change can be incurred. A
participant will be reimbursed after CCC reviews
the claim and determines that it is
(b) All claims for reimbursement must be received no later
than 90 calendar days following the expiration
or termination date of the project agreement.
(c) Participants shall maintain complete records which fully
identify all project expenditures by QSP
agreement number, project year, country or
region, activity number and cost category. Such
records shall be accompanied by original
documentation which supports the expenditures
and shall be made available to CCC upon request.
(d) Participants shall maintain all records and documents
relating to QSP projects, including the original
documentation which supports expenditures and
reimbursement claims, for a period of three
calendar years following the expiration or
termination date of the project agreement, and
shall make such records and documents available
upon request to authorized officials of the U.S.
Government. Such records and documents will be
subject to verification by the FAS Compliance
Review Staff (CRS).
(e) CCC may deny a claim for reimbursement or may disallow a
claim for reimbursement that has already been
paid for any of the following reasons:
(1) The claim for reimbursement is not supported by
(2) Project funds were spent on unapproved activities:
(3) The participant violated a provision of these
regulations, including section 1483.12(b).
(f) In the event that a reimbursement claim is overpaid or is
disallowed after payment has been made, the
participant shall return the overpayment amount
or the disallowed amount to the CCC within 30
days after realizing the overpayment or
receiving notification of the overpayment or
disallowed amount, unless the participant avails
itself of the procedures set forth in Sec.
Sec. 1483.10 What are the
The QSP participant must submit a written evaluation report
within 90 days of the expiration of its QSP
agreement. Evaluation reports should address all
performance measures that were presented in the
Sec. 1483.11 How is program
(a) QSP agreements are subject to review and verification by
the CRS. Upon request, a QSP participant shall
provide to CCC the original documents which
support the participant's reimbursement claims.
(b) CRS performs periodic on-site reviews of QSP participants
to ensure compliance with this part, applicable
federal regulations, and the terms of the
(c) The Director, CRS, will notify a QSP participant through
a compliance report when, in the opinion of the
Director, CRS, it appears based on CRS' review
or other acceptable sources of information,
including but limited to, USDA's Office of the
Inspector General or other federal or state
government agencies, that CCC is entitled to
recover funds from the participant. The report
will state the basis for this action. Upon
receipt of the compliance report, that
will return the funds to CCC within 30 days as
set forth in Sec. 1483.9(f), unless the
participant wishes to pursue the procedures set
forth below in paragraphs (d) through (i) of
(d) A participant may within 60 days of the date of the
compliance report, submit a written response to
the Director, CRS. The Director, CRS, at his or
her discretion, may extend the period for
response up to an additional 30 days. The
response shall include:
(1) Repayment of any funds determined to be due to CCC;
(2) Submission of documentation or evidence or any other
required action; or
(3) A request for reconsideration of any finding and the
supporting justification for the request.
(e) If after review of the compliance report and response,
the Director, CRS determines that the
participant owes money to CCC, the Director,
CRS, will so inform the participant and provide
a detailed basis for the decision. The
participant has 30 days from the date of the
Director's, CRS, determination to submit any
money owed to CCC or to request reconsideration.
(f) If the participant does not respond to the compliance
report within the required time period, the
Director, CRS, may initiate action to collect
any amount owed to CCC pursuant to 7 CFR part
1403, Debt Settlement Policies.
(g) A participant may appeal the determinations of the
Director, CRS, to the Deputy Administrator, CMP.
The request must be in writing and be submitted
to the Office of the Deputy Administrator, CMP,
within 30 days following the date of the
original determination. The participant may
request a hearing.
(h) If the participant submits its appeal and requests a
hearing, the Deputy Administrator, or the Deputy
Administrator's designee, will set a date and
time, generally within 60 days. The hearing will
be an informal proceeding. A transcript will not
ordinarily be prepared unless the participant
bears the cost of the transcript; however, the
Deputy Administrator or designee may have a
transcript prepared at FAS's expense.
(i) The Deputy Administrator or the Deputy Administrator's
designee will base the determination on appeal
upon information contained in the administrative
record and will endeavor to make a determination
within 60 days after submission of the appeal,
hearing, or receipt of any transcript, whichever
is later. The determination of the Deputy
Administrator will be the final determination of
FAS. The participant must exhaust all
administrative remedies contained in this
section before pursuing judicial review of a
determination by the Deputy Administrator.
Sec. 1483.12 Miscellaneous
(a) Disclosure of Program Information.
(1) Documents submitted to CCC by participants are subject to
the provisions of the Freedom of Information Act
(FOIA), 5 U.S.C. 552, 7 CFR part 1, subpart
A--Official Records, and specifically 7 CFR
``Handling Information from a Private
(b) Ethical Conduct.
(1) A participant shall conduct business overseas in
accordance with the laws and regulations of the
country in which an activity is carried out.
(2) A participant shall not use program activities or program
funds to promote private self-interests or to
conduct private business.
(3) Participants, members of the participating organization,
and their affiliates are prohibited from using
any association with this program to make export
sales of any agricultural commodities or
products covered under the terms of the
agreement and from using any association with
this program to charge a fee for facilitating an
export sale of any agricultural commodities or
products covered under the terms of the
agreement. A participant may, however, collect
check-off funds and membership fees that are
required for membership in the participating
(4) A participant shall immediately report any actions or
circumstances that have a bearing on the
propriety of the program in writing to the FAS.
(c) Additional Program Requirements. QSP participants are
required to comply with cargo preference
requirements (shipment on U.S. flag vessels, as
required) and compliance with Fly America Act
requirements (shipment on U.S. air carriers, as
Dated: July 21, 2006.
Michael W. Yost,
Administrator, Foreign Agricultural Service, and
Vice President, Commodity Credit Corporation